Judge asks enviros for ideas to punish gas company

By MICHELLE R. SMITHAssociated Press

May 7, 2013 05:19 PM

By MICHELLE R. SMITHAssociated Press

May 7, 2013 05:19 PM

Apparently frustrated by a U.S. Supreme Court decision that struck down an $18 million penalty for a Texas natural gas firm, a federal judge is taking the unusual step of asking the environmental community for suggestions on how to sentence the company in a way that will have "the broadest possible impact."

U.S. District Judge William Smith in Providence said in a preliminary sentencing memorandum filed April 25 that the high court's decision means he is limited to fining Southern Union Co. $500,000 or the equivalent in community service, rather than the $6 million fine and $12 million in charitable contributions that he had previously imposed as punishment.

"This result is manifestly unsatisfactory and even unjust," Smith wrote in his decision.

Saying he was doing the best he could in a bad situation, Smith wrote that he has decided a community service sentence would be most appropriate. He then gave prosecutors, Southern Union and unspecified members of the greater environmental community 90 days to suggest a community service sentence valued at no more than $500,000.

Smith wondered aloud during a hearing on the matter in December whether he could order "higher-ups" at the company to perform community service as punishment, and it was unclear Tuesday whether he would consider that.

He hopes his invitation will spur "creative ideas," said David DiMarzio, clerk of court for U.S. District Court in Providence. DiMarzio likened the request to letters submitted by family members and those affected by a crime when defendants are being sentenced, but said he had never seen such a request by a judge in this kind of case.

It's highly unusual for a judge to invite those other than victims of the crime to weigh in on a sentence, said David Uhlmann, a University of Michigan law professor who was the top environmental crimes prosecutor at the U.S. Department of Justice when the case was brought. But he said he believes the judge is allowed to do it.

A lawyer for Southern Union did not return a phone call seeking comment. A spokesman for the U.S. attorney's office said it would prepare a sentencing memo to meet the judge's request, but did not comment further.

Smith said Southern Union had broken the law for more than two years by storing liquid mercury without a permit inside a neglected building in a densely populated section of Pawtucket. The mercury came from old gas regulators the company was removing from customers' homes, and was left around in glass jars, a plastic jug and other containers.

In 2004, teenagers broke into the building and dumped mercury there and at a nearby apartment complex, which had to be evacuated. Many residents later were found to have unacceptably high levels of mercury in their blood and showed other symptoms of mercury exposure, such as hair loss and rashes, and about 90 of them later settled a lawsuit over the spill for undisclosed terms. All have recovered.

Smith said in his memorandum that Congress had deemed the crime so serious that it imposed a maximum sentence of $50,000 per day, but that Southern Union, a company that reported $9.9 billion in assets in December, could escape with a penalty of $500,000 - even though prosecutors say the illegal conduct went on for 762 days.

"It is not an adequate penalty to punish Southern Union for its conduct, nor will it deter Southern Union or other similarly situated companies from similar actions in the future," Smith wrote.

In the December hearing, Smith asked a prosecutor whether he would have the authority to order Southern Union to have its employees perform 10,000 hours of environmental cleanup work. The prosecutor responded that he did.

"If I have the authority to do that, do I have the authority to designate who in the company should do that?" Smith asked, then indicated he was talking about "higher-ups" rather than low-level people at the company. The prosecutor said he wasn't sure.

Uhlmann said he shared the judge's concern that a $500,000 penalty was too low but said it would be difficult to see how Smith could order individuals to perform community service when the corporation, not any specific person, was convicted of wrongdoing. He said he respectfully disagreed with the judge's determination that the law does not allow him to convene a new sentencing hearing in the case, but said it is possible the government could appeal that part of the decision.